Butterfield CEO buoyed by latest results
The Bank of N.T. Butterfield & Son Limited (“Butterfield” or the “Bank”) (BSX: NTB.BH; NYSE: NTB) today announced financial results for the quarter ended September 30, 2026.
Net income for the third quarter of 2026 was $61.0 million, or $1.50 per diluted common share, compared to net income of $46.9 million, or $1.16 per diluted common share, for the previous quarter and $61.1 million, or $1.46 per diluted common share, for the third quarter of 2025. Core net income for the third quarter of 2026 was $64.2 million, or $1.58 per diluted common share, compared to $63.9 million, or $1.58 per diluted common share, for the previous quarter and $63.3 million, or $1.51 per diluted common share, for the third quarter of 2025.
The return on average common equity for the third quarter of 2026 was 21.3% compared to 16.6% for the previous quarter and 22.5% for the third quarter of 2025. The core return on average tangible common equity for the third quarter of 2026 was 25.0%, compared to 25.0% for the previous quarter and 25.5% for the third quarter of 2025. The efficiency ratio for the third quarter of 2026 was 59.8%, compared to 67.6% for the previous quarter and 57.7% for the third quarter of 2025. The core efficiency ratio1
for the third quarter of 2026 was 57.8% compared with 57.0% in the previous quarter and 56.2% for the third quarter of 2025.
Michael Collins, Butterfield’s Chairman and Chief Executive Officer, commented, “Our third quarter earnings were solid, underpinned by stronger net interest and non-interest income along with reduced credit loss provisions. These results underscore the strength and resilience of Butterfield’s diversified business model and our dedication to meeting the evolving needs of our retail, corporate, and high net worth clients. We continue to prioritize disciplined capital and risk management, outstanding client service, and the creation of sustainable long-term value.
“During the third quarter, we made meaningful progress toward closing the previously announced acquisition of CIBC Caribbean. At our annual meeting on September 18, our shareholders showed their support for the
transaction by strongly voting in favor of the issuance of Butterfield shares in connection with the transaction. We continue to expect closing in the first half of 2027.
“Regulatory engagement and integration planning are progressing as expected, and we remain confident in our ability to successfully execute the transaction and realize its long-term strategic and financial benefits. Following the closing, Butterfield will be the leading independent bank across the Atlantic and English-speaking Caribbean with expanded capabilities to provide enhanced personal, corporate, and wealth management services.”
The reported net income for the third quarter of 2026 included $3.2 million of non-core, deal-related expenses, primarily associated with the acquisition of CIBC Caribbean and, to a lesser extent, integration-related costs for the R&H Guernsey business. Core net income¹ increased $0.3 million in the third quarter of 2026 compared to the prior quarter.
NII for the third quarter of 2026 was $97.2 million, an increase compared to $95.6 million in the previous quarter and $4.4 million higher than $92.7 million in the third quarter of 2025. NII increased during the third quarter of 2026 compared to the prior quarter and the third quarter of 2025 due to the ongoing reinvestment of securities at higher yields and improved treasury returns, partially offset by loan yield compression and modestly higher deposit costs.
Net interest margin (“NIM”) for the third quarter of 2026 was 2.76%, an increase of 2 basis points from the previous quarter and 3 basis points higher compared to 2.73% in the third quarter of 2025. The increase in NIM during the third quarter of 2026 compared to the prior quarter and the third quarter of 2025, resulted from higher yields on reinvestments and treasury securities, partially offset by loan yield compression and modestly higher deposit costs.
Non-interest income for the third quarter of 2026 was $64.8 million, an increase of $1.4 million from $63.4 million in the previous quarter and $3.6 million higher than the $61.2 million in the third quarter of 2025. The increase in the third quarter of 2026 compared to the prior quarter resulted from higher banking service revenue driven by increased card volumes and a non-recurring contractual incentive. Non-interest income in the third quarter of 2026 was higher than the third quarter of 2025 due to higher trust revenue from the new R&H Guernsey business and updated fee agreements, offset by lower time-based fees.
Non-interest expenses were $99.3 million in the third quarter of 2026, compared to $109.8 million in the previous quarter and $90.8 million in the third quarter of 2025. Core non-interest expenses1 of $96.2 million in the third quarter of 2026 were higher compared to the $92.9 million incurred in the previous quarter and the $88.5 million in the third quarter of 2025. Core non-interest expenses in the third quarter of 2026 increased compared with the prior quarter and third quarter of 2025, primarily driven by higher salaries and benefits and other expenses.
Period end deposit balances increased to $12.9 billion from $12.7 billion at December 31, 2025. Average deposits were $13.1 billion in the quarter ended September 30, 2026, relatively flat from the prior quarter. The Board declared a quarterly cash dividend of $0.50 per common share to be paid on November 25, 2026 to shareholders of record on November 10, 2026. No common shares were bought back under the Bank’s share repurchase program during the third quarter of 2026, as the program was paused following the May 28, 2026 announcement of Butterfield’s planned acquisition of CIBC Caribbean from CIBC.
The current total regulatory capital ratio as at September 30, 2026 was 29.6%, compared to 27.8% as at December 31, 2025. Both of these ratios remain conservatively above the minimum regulatory requirements applicable to the Bank.
Net Income
Net income for the quarter ended September 30, 2026 was $61.0 million, up from $46.9 million in the prior quarter.
The change in net income during the quarter ended September 30, 2026 compared to the previous quarter is
attributable to the following:
$1.6 million increase in net interest income driven by the continued reinvestment of the securities portfolio
at higher yields and improved treasury returns, partially offset by ongoing loan yield compression and
modestly higher deposit costs;
$0.7 million decrease in total gains (losses) reflecting the absence of the prior quarter’s gain on the sale of
previously fully reserved collateral in the Channel Islands;
$1.4 million increase in non-interest income, driven by (i) $0.6 million increase in foreign exchange fees
resulting from higher transaction volumes; and (ii) $0.8 million increase in banking fees due to higher card
volumes and non-recurring contractual incentive; and
$10.5 million decrease in non-interest expenses, primarily due to lower non-core business acquisition-related
costs of $3.2 million, compared with $16.9 million in the previous quarter, partially offset by (i) $1.5 million
increase in salaries and benefits related to staff departure costs; and (ii) $0.5 million increase in other
expenses.
Non-Core Items
Non-core items resulted in expenses, net of gains, of $3.2 million for the third quarter of 2026. Non-core items for the quarter are comprised principally of acquisition-related expenses.
Management does not believe that comparative period expenses, gains or losses identified as non-core are
indicative of the results of operations of the Bank in the ordinary course of business.
(1) See table “Reconciliation of US GAAP Results to Core Earnings” below for reconciliation of US GAAP results to non-GAAP measures.
BALANCE SHEET COMMENTARY AT SEPTEMBER 30, 2026 COMPARED WITH DECEMBER 31, 2025
Total Assets
Total assets of the Bank were $14.3 billion at September 30, 2026, an increase of $0.2 billion from December 31,
The Bank maintained a highly liquid position at September 30, 2026, with $9.4 billion of cash, bank deposits, reverse repurchase agreements and liquid investments representing 65.6% of total assets, comparable with 65.6% at December 31, 2025.
Loans Receivable
The loan portfolio totaled $4.4 billion at September 30, 2026, relatively flat compared to December 31, 2025.
The allowance for credit losses at September 30, 2026 totaled $27.0 million, an increase of $1.6 million compared to $25.4 million at December 31, 2025. The increase was driven by a net increase in provisioned non-accrual loans.
The loan portfolio represented 30.7% of total assets at September 30, 2026 (December 31, 2025: 31.1%), while loans as a percentage of total deposits was 33.9% at September 30, 2026 (December 31, 2025: 34.5%). Both ratios remain relatively stable at September 30, 2026 compared to December 31, 2025.
As at September 30, 2026, the Bank had gross non-accrual loans of $119.6 million, representing 2.7% of total gross loans, an increase of $28.3 million from $91.3 million, or 2.1% of total loans, at December 31, 2025. The increase in non-accrual loans was driven by two well-secured residential mortgage facilities in the Channel Islands & UK segment, with the impact partially offset by the repayment of a separate facility within the same segment. The facilities remain well secured with no expected loss content.
Investment in Securities
The investment portfolio was $5.6 billion at September 30, 2026, and remained broadly stable compared with December 31, 2025 balances.
The investment portfolio is made up of high-quality assets with 100% invested in AA-or-better-rated securities. The investment book yield was 2.87% during the quarter ended September 30, 2026 compared with 2.78% during the previous quarter. Total net unrealized losses on the available-for-sale portfolio increased to $187.3 million, compared with total net unrealized losses of $89.4 million at December 31, 2025, as a result of rising long-term US dollar interest rates.
Deposits
Average total deposit balances were $13.1 billion for the quarter ended September 30, 2026, compared with $12.6 billion in the quarter ended December 31, 2025. Period end balances as at September 30, 2026 were $12.9 billion, higher compared to $12.7 billion in December 31, 2025
Assets Under Administration and Assets Under Management
Total assets under administration for the trust and custody businesses were $155.2 billion and $30.9 billion, respectively, at September 30, 2026, while assets under management were $6.8 billion at September 30, 2026. This compares with $134.7 billion, $32.3 billion and $6.9 billion, respectively, at December 31, 2025.
Reconciliation of US GAAP Results to Core Earnings
The table below shows the reconciliation of net income in accordance with US GAAP to core earnings, a non-GAAP measure, which excludes certain significant items that are included in our US GAAP results of operations. We focus on core net income, which we calculate by adjusting net income to exclude certain income or expense items that are not representative of our business operations, or “non-core”. Core net income includes revenue, gains, losses and expense items incurred in the normal course of business. We also present certain other non-GAAP financial measures, including tangible common equity and related tangible equity measures. We believe that these nonGAAP financial measures provide a meaningful base for period-to-period comparisons, which management believes will assist investors in analyzing the operating results of the Bank and predicting future performance. We believe that presentation of these non-GAAP financial measures will permit investors to assess the performance of the Bank on the same basis as management.
